Washington Stirs As India Undermines Patents

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WEDNESDAY, OCTOBER 23, 2013 ASIA SPECIAL Washington stirs as India undermines patents By David Weller and Himanshu Singh its 2011 National Manufacturing Policy, quartered pharmaceutical company) the When India joined the World Trade Or- aimed to support the local manufacturing right to sell Nexavar, an oncology medica- ganization (WTO), it committed to imple- ndia’s approach to pharmaceutical pat- industry, the Indian government invited a tion produced by Bayer, without its autho- ment WTO Agreement on Trade-Related ents is garnering increased attention government-created technology fund to rization. It was the first compulsory license Aspects of Intellectual Property Rights in Washington, with recent high-level I seek the issuance of a compulsory license granted by the Indian government to a local (TRIPS), including provisions related to pressure on the Indian government to do for the “latest patented green technology” pharmaceutical company and it was not is- granting and enforcing patents. India nego- more to protect intellectual property. — where “technology is not being provid- sued under a state of emergency. Rather, it tiated a special phase-in for pharmaceutical In particular, India’s recent endorsement ed by the patent holder at reasonable rates was granted primarily for economic and ac- products, in light of the fact that India had of compulsory licenses as a tool to address or is not being worked in India to meet the cess reasons that set a dangerous precedent not traditionally provided patent protection. drug pricing has caused widespread con- domestic demand in a satisfactory manner.” for patent holders. Effective Jan. 1, 2005, pharmaceutical cern in the biopharma sector, as well as Third, India has taken other actions of In the Nexavar case, the patent controller products were to be eligible for patent pro- in other sectors that rely on strong patent concern regarding patent protection. No- found that a compulsory license was jus- tection in India. TRIPS contains “national protection. vartis AG spent more than six years fight- tified because the Nexavar patent had not treatment” or nondiscrimination require- How India responds to these concerns, ing the Indian Patent Office’s decision been “worked in the territory of India,” ments, including that patents shall be ful- and what actions the U.S. government takes to deny a patent for its anti-cancer drug which he determined to mean “manufac- ly available and enforceable regardless of to press them further, will shape the climate Glivec, which is patented in at least 40 oth- tured to a reasonable extent in India.” whether the products are imported or the for intellectual property protection in India er countries. In April, the Indian Supreme This type of forced local manufacturing is place of invention. TRIPS also contains and U.S.-India trade relations. It may also Court affirmed the Indian Patent Office’s abhorrent to international trade norms. And detailed procedures that governments must establish a precedent more generally on the decision, based in part on the controversial at the same time, the controller found Bay- follow if they seek to issue compulsory li- circumstances under which governments Section 3(d) of India’s Patents Act. er’s price was too expensive given India’s censes. can justifiably override patent rights in the average per capita income — a fact that In light of India’s recent approach to com- name of other objectives. India’s recent endorsement of would presumably be the case for many pulsory licenses, as well as controversial In June, 40 senators wrote to Secretary drugs absent adequate public financing of decisions on patent issuance and revoca- of State John Kerry asserting that India’s compulsory licenses as a tool health care. In March, India’s Intellectual tion, there is likely to be increased scruti- actions on pharmaceutical patents (as well to address drug pricing has Property Appellate Board denied Bayer’s ny of whether India is complying with its as forced local sourcing of certain informa- caused widespread concern in appeal and upheld the compulsory license WTO obligations. The level of concern and tion technology products) are “inconsistent grant. attention in Washington regarding India’s with international norms and appear to vi- sectors that rely on strong patent In the months since, India’s Ministry of patent policies is likely to only increase. olate India’s obligations in the World Trade protection. Health has moved toward granting compul- Organization.” David Weller, former deputy assistant In October 2012, the Indian Patent Office sory licenses on additional patented med- The senators urged Kerry to take “swift U.S. trade representative for China, is a revoked Pfizer’s patent for kidney cancer ications. action and make clear to your Indian coun- partner in the Washington, D.C. office of drug Sutent on the basis that the patent India’s actions are causing high levels of terparts that the United States will consider the WilmerHale law firm in its Regulatory does not involve any inventive steps, based concern because the government is using all trade tools at its disposal if India does and Government Affairs Department and a on a hindsight analysis. (In June, the matter an extraordinary tool generally reserved for not end its discriminatory practices.” In member of the International Trade, Invest- was sent back to the Indian Patent Office to health emergencies — the forced overrid- the House of Representatives, 171 mem- ment and Market Access Practice Group. reconsider its previous revocation.) ing of patents — as part of a broader policy bers sent a similar letter. Seventeen leading He represents clients regarding trade and In November 2012, India’s Intellectual of trying to contain costs and a narrow in- regulatory impediments to accessing foreign U.S. trade associations wrote to President Property Appellate Board revoked Roche’s dustrial policy of assisting domestic com- markets in international dispute settlement Barack Obama complaining about these patent for anti-hepatitis drug Pegasys on panies. proceedings and on trade policy issues. issues and called for tough action. And in the basis that, while providing improved With respect to the former — cost con- He may be reached at (202) 663-6544 or recent meetings with the Indian govern- performance, Pegasys did not produce sur- tainment — this is an issue that faces most [email protected]. ment, senior U.S. government officials prising or unexpected improvements, again governments. India, without a doubt, fac- have raised their concerns. relying on Section 3(d) of the Patents Act. es serious public health challenges and is Himanshu Singh is a senior associate India has responded by defending its in- in the Palo Alto office of the WilmerHale It has been India’s use of compulsory li- a developing country. But it also boasts a tellectual property policies as consistent law firm in its Litigation/Controversy De- censes that has caused perhaps the biggest growing middle class of more than 300 with international rules and, to date, has partment. He has extensive experience concern among companies and policymak- million people. not publicly suggested any willingness to in various stages of litigation, including ers. India’s Patents Act gives the Indian Overriding patents to lower costs would change course. complaint and answer, fact and expert dis- government broad authority to issue com- represent a fundamental change to the The concerns expressed in Washington covery, trial preparation, motion practice pulsory licenses. Section 84 allows a com- patent system, taking away the value of a stem from several recent developments, and depositions, among others. He may be pany to apply for a compulsory license on patent that incentivizes high-risk research. each of which is concerning in its own reached at (650) 858-6038 or Himanshu. various grounds, including where “the pat- In any event, compulsory licenses for pat- [email protected]. right, and even more so when viewed in the ented invention is not worked in the territo- ented products do not necessarily lead to aggregate. ry of India” or “that the patented invention affordability. First, the Indian government has looked is not available to the public at a reasonably In the case of Nexavar, the Indian phar- to “compulsory licenses” — the forced affordable price.” And under Section 92, a maceutical company is authorized to sell overriding of patent rights — as a means to compulsory license can be granted on an the drug at a monthly price that substan- reduce drug prices, even in nonemergency expedited basis, without a request even tially exceeds India’s monthly per capita contexts, and to support India’s pharma- having been made to the patent holder for a income. ceutical industry by expanding the pool of voluntary license. With respect to industrial policy, using drugs available for copying. In March 2012, India’s patent controller patent policy to force local manufacturing Second, in other sectors, India has also issued a compulsory license under Section or to support domestic industry runs direct- endorsed compulsory licenses as a tool. In DAVID WELLER HIMANSHU SINGH 84 that gave Natco (a Hyderabad-head- ly at odds with international trade rules. WilmerHale WilmerHale